9911796707
TMI Blog2021 (3) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ling its commencement at the hands of Adjudicating Authority who was required, in terms of mandate of Section 7(4) (5) of I B Code to pass an order of admission or rejection of such Application within fourteen days of the receipt of the Application. The commencement of CIRP takes effect from the date of admission of Application as specifically laid down under sub-section (6) of Section 7 of the I B Code. All that the Adjudicating Authority is required to do is to ascertain the existence of default and on being satisfied that a default has occurred and the Application is complete, the Adjudicating Authority is required to admit the Application. The existence of default in respect of financial debt would be ascertainable from the records of an Information Utility or on the basis of other evidence furnished by the Financial Creditor. Where the Adjudicating Authority is satisfied that there is no financial debt payable in law or infact or that default has not occurred, it may reject such Application but if the Application is incomplete, the Financial Creditor has to be provided an opportunity of rectifying the defect in the Application within seven days of notice received from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 7 of Insolvency and Bankruptcy Code, 2016 (for short I B Code ). It happened sometime in January 2020. The Corporate Debtor filed IA No.570 of 2020 in the aforesaid Company Petition being CP(IB) No.264/MB/2020 seeking stay of further proceedings in the Company Petition by projecting its inability in servicing the debts in respect whereof default was alleged by the Financial Creditor by projecting disputes between the Corporate Debtor and the recipient of energy as well as change in supply chain management of the recipient of energy hindering it from carrying on its business, in respect whereof disputes were pending determination before the Hon ble Apex Court and other Authorities. On consideration of the Application of Corporate Debtor the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench, Court No.II (Special Bench) passed order dated 29th of January, 2021 rejecting the Application of Corporate Debtor with observation that the dispute of the Corporate Debtor with the Regulator or the recipient of energy would be extraneous to the matters involved in the Company Petition and the decision in matters pending before Hon ble Apex Court and other Authorities would h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant. It is submitted that the admission of Application of Respondent under Section 7 of the I B Code would adversely impact the outcome of the litigation as regards revision tariff in order to recover its actual costs. It is further submitted that the Coal India Limited, did not execute an FSA for unit 1 with the Appellant as this unit did not figure in its list of Power Plants having capacity of 78000 MW. Coal India Limited even did not execute FSA for unit 1 of Appellant for allocating coal linkages under the notified SHAKTI Policy. This is said to have compelled the Appellant to file Writ Petition No.10614 of 2017 before the Hon ble High Court of Delhi which is still pending adjudication. It is further submitted on behalf of the Appellant that MERC delayed its verdict for over two years causing unprecedented financial stress to Appellant. It is further submitted that the Respondent is pursuing substitution under PPA before Hon ble Apex Court while simultaneously pursuing the CIRP in I B proceedings initiated against the Appellant. The Appellant intends to settle the dues of Respondent by way of its recovery from the pending Hon ble Supreme Court Appeal and this Appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) of I B Code to pass an order of admission or rejection of such Application within fourteen days of the receipt of the Application. The relevant provisions are reproduced herein below: - Section 7(4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3). (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y resolution in a time bound manner. The dictum of law laid down by the Hon ble Apex Court in Innoventive Industries Ltd. Vs. ICICI Bank and Anr. (2018) 1 SCC 407 on this proposition of law is loud and clear and same has been reiterated in host of judgments thereafter, which is now the settled and established position of law. 8. It is significant to notice that the Application filed by the Corporate Debtor seeking stay of proceedings before the Adjudicating Authority did neither dispute the existence of debt owed to the Respondent Bank nor did it raise any issue in regard to the event of default as alleged by the Respondent Bank. Its therefore, clear that debt and default are not disputed. The financial woes of the Appellant and the liquidity problems faced by it, whether forced upon it or of its own making, have no bearing on commencement of insolvency resolution and cannot be permitted to be a stumbling block in triggering of CIRP at the instance of Financial Creditor. The commencement of CIRP proceedings has already been delayed by one year much to the chagrin of Respondent (Financial Creditor) who has been virtually compelled to be a spectator helplessly watching the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
